Guest Author - Tony Daltorio
It is the basic nature of things. Nothing or no one stays on top forever.
Look at the mighty US consumer - long the dominant force in world trade. But no longer...we've crossed an important threshold.
The US consumer has been surpassed by consumers in the emerging world. Emerging market economies now represent about 33 percent of consumer spending worldwide. US consumer spending now accounts for only 27 percent of total global consumer spending.
One example of this trend is the automobile market. China's vehicle market grew by 45 percent last year to become the biggest in the world. GM, for the first time ever, now sells more cars in China than in the United States.
The Economist Magazine said that multinational companies expect about 70 percent of the world's economic growth over the next few years to come from emerging markets. And 40 percent of the world's growth will come from just two countries - China and India.
But these two countries are not alone. Many countries' economies are growing at a torrid pace. Singapore, for instance, grew at a rate of 18 percent in the first half of 2010.
It's a great time to be an investor as we witness the history-making shift in global markets. Especially for investors who look for opportunities outside slow-growing economies like the United States.
At the least, investors should look at multinational companies such as Coca Cola. Coke now gets about 75 percent of its sales from overseas. In the first quarter of 2010, Coke reported a 20 percent increase in profits despite the fact that US sales declined. Sales in emerging markets, such as India (up 29%)and Turkey (up 18%) made it possible.
And many large emerging consumer markets remain nearly untapped. Indonesia, for instance. It has the world's fourth largest population - behind China, India and the United States - with 240 million people.
Ford just opened its first dealership there. And Heinz reports that Indonesia is a big part of why its Asian sales rose 41 percent last year.
Yet, despite all these exciting changes in the global economy, most US investors continue to snooze. They continue to have nearly all of their portfolio concentrated on the nearly-moribund US economy.
There are simple, easy ways to invest overseas through the use of exchange traded funds (ETFs). Please feel free to send an email and I will be glad to help you find some ETFs.